The two pension funds, which comprise about $63 billion in assets, don’t seem likely to follow the other retirement plans in abandoning oil and gas holdings.
First the city’s massive pension funds for teachers and for employees of most city agencies announced they were divesting from fossil fuel reserve companies. Then a smaller fund that serves other schools employees joined in.
Don’t expect the cops and firefighters to jump on board any time soon. Two of the unions involved in operating those funds told City Limits they have misgivings about turning away from fossil-fuel stocks for what they see as political reasons.
“Every pension fund trustee has a fiduciary responsibility to act in the best interest of the fund beneficiaries for the exclusive purpose of providing benefits. Simply put, the money in the pension fund does not belong to us, nor to the comptroller, nor to the mayor,” Patrick Lynch, president of the Police Benevolent Association, told City Limits in a statement. “It belongs to the active and retired police officers who have worked and sacrificed to earn their pensions. Our views on any social or political issue cannot enter into the equation. The same is true for the elected officials who sit on the board.”
Andrew Ansbro, the president of the Uniformed Firefighters Association, echoed his cop union counterpart. “We have not entertained that idea of divesting from fossil fuels. And it is not something we will entertain,” he said in an interview. “We do not see our pension fund as an object to be used to make political statements. Or job is to provide for our retirees.”
The city’s retirement plans together comprise one of the 20 largest pension funds in the world. The five funds, however, vary widely in size.
The teacher’s fund holds $91 billion in assets, and NYCERS—the fund to which most other retirees belong—is worth $77 billion. The Board of Education Retirement System, or BERS, is the smallest, with a portfolio of $7.8 billion. Together, those funds serve over 260,000 retirees, and they will shed some $4.1 billion in fossil fuel company holdings.
The police pension fund and fire pension fund are smaller, with $46 billion and $17 billion under management, respectively. Some 54,000 retirees depend on the police fund, and some 17,000 on the fire fund.
Those two funds are overseen by boards of trustees with voting power split evenly between city officials (the mayor, comptroller, finance commission, and NYPD and FDNY commissioners) and union representatives.
Mayor Bill de Blasio and Comptroller Scott Stringer have said the move to divest from fossil-fuel reserve companies is motivated by profit as much as principle. “Fossil fuels are not only bad for our planet and our frontline communities, they are a bad investment,” the mayor said as he announced the divestment last week.
But Ansbro doesn’t see it that way. “We’re definitely going to invest in green energy but to wholesale just say you’re getting out of a sector is just not something we’re interested in doing,” he said. “Fossil fuels are not going away tomorrow. There’s still going to be people who make money in that sector.” He added: “The fact is, I haven’t seen an electric fire engine.”
“By making your investment choices based on politics, you’re putting the taxpayer at risk, which then in turn results in an attack on our benefits,” he continued. Taxpayers are on the hook if the pension funds generate less money than retirees have been promised.
The other police and fire unions did not respond to requests for comment.
City Hall and the comptroller’s office first announced the intention to divest in 2018, and have since that time been developing what they say is a strategy to unload the stocks—and scoop up “green” investments—in a way that protects fund earnings.
Neither the police nor fire funds hold large shares of fossil-fuel stocks. At last count, they jointly held about $68 million in Exxon-Mobil stock and roughly 670,000 shares in Chevron. NYCERS alone had $126 million in Exxon holdings and more than 1.1 million Chevron shares, according to its most recent annual report.
Ansbro notes that despite the fire and police funds’ resistance to divestment, the comptroller’s bureau of asset management could simply stop recommending fossil-fuel companies to the trustees for approval to invest. Only stocks screened by the bureau are eligible for investments.
The pension funds have split on divestment before. The teachers fund and NYCERS divested from gun manufacturers stocks before BERS did, and the police and fire funds have yet to follow suit. Only NYCERS has also divested from gun retailers. While all five pension funds have prohibitions against companies linked to the regimes in Iran and Sudan and have divested from private prisons, the police and fire funds can still invest in thermal coal. And only one fund, NYCERS, has pledged to buy no more tobacco stocks, according to the comptrollers’ office.